Partnership aims to help housing growth in two northwest Minnesota communities

Bemidji Minnesota P.O. Box 455 56619

By Ryan Bakken

Forum News Service

Despite a demand for more housing in northwestern Minnesota, developers and bankers have been gun-shy about building.

Advertisement

Advertisement

"We needed someone to prime the pump," said Todd Peterson, Roseau’s community development coordinator.

Consider the pump primed.

A partnership of the cities of Roseau and Warroad, major employers Marvin Windows of Warroad and Polaris of Roseau and the Greater Minnesota Housing Fund has created a $1.6 million construction fund for a plan to build 10 homes in Roseau County this year and more over the next two years.

"The goal is to try to get some houses built to generate more interest and more momentum in the housing market," Peterson said. "It’s just kind of been stuck.

"There’s a housing demand, but no one seemed willing to take that first step and put a house up."

Construction is expected to begin this month.

Stimulate building

The Greater Minnesota Housing Fund was created by several Minnesota foundations, most notably the Knight Foundation, according to Warren Hanson, the organization’s president. Since its inception in 1996, it has helped to finance about 11,000 housing units in the state.

The plan was hatched when Hanson and Minnesota Gov. Mark Dayton met with the business and city leaders on a visit to the northwestern corner in February.

"We provide money to stimulate home building where it’s needed and we share the risk with the builders," Hanson said.

"We provide low-cost financing to builders with 2 percent loans. We help raise local money by providing our money as a match. And we provide down payment systems for the homebuyers."

The housing fund contributed $530,000 of the $1.6 million while the city of Roseau and Polaris each added $375,000, Marvin Windows $210,000 and the city of Warroad $110,000. The contributions are at no great risk, Hanson said, because the entities get their money back when the homes sell.

"Of the $1.6 million we’ve created, at least $1.5 million will go back to all the funders."

Hanson said the returned money then will be used to stimulate more home building. Hopes are that the money will revolve two or three times.

"What we expect to happen is home sales will create some movement in the market," he said. "We hope that the banks and other builders will join in the frenzy and the market will work again."

Apartment need

Also under consideration, Hanson said, are two funding requests for apartment buildings that would add 40 units this year.

"The rental situation is more desperate than the housing and is the hardest to address," Hanson said. "We’re hoping that the single-family construction will free up some apartments."

Kathy Lovelace, Warroad’s city administrator, said apartments are the biggest need in her town with Marvin Windows hiring again. The increased hiring at Polaris also has brought new residents to Warroad.

"We have virtually no apartments open in town," Lovelace said. "We don’t have the immediate housing crunch that they’re feeling in Roseau. But, most of our homes are smaller than what families want these days."

But, she said, the housing shortage is a product of good times. "A lot of stuff is going on in Warroad," she said. "It’s exciting. Things are looking good."

Hanson said he hopes that the alliance will jump-start construction.

"When the housing market bottom dropped out, people decided building houses was not the best way to make money," he said. "So, no one wants to be the first one back in the pool. They want to see that it’s successful before they jump in.

The Forum Communications News Service is the premier news wire service covering the Upper Midwest, stretching from the oilfields of western North Dakota to the plains of South Dakota and to the shores of eastern Minnesota.
For more information about the services we offer or to discuss content subscriptions, please contact us.